Low Cost Health Plan for Working Californians Stalls in Assembly

August 16, 2012

Sacramento, CA – Legislation by California State Senator Ed Hernandez, O.D. (D– West Covina) which would extend affordable, quality healthcare coverage to nearly one million low-income Californians at no additional cost to state taxpayers was blocked today by members of the Assembly Appropriations Committee, despite the fact that the bill would actually save the state money.

The Affordable Care Act (ACA), signed into law by President Obama in 2010, permits states to create health plans for low-income individuals financed almost exclusively with federal dollars. Senate Bill 703 establishes a “Basic Health Plan” (BHP) in California that would provide quality health care coverage to over 900,000 Californians for as little as $20 a month.

“The Assembly Appropriations Committee’s action today is a tremendous disappointment and a real setback in our efforts to make sure low-income Californians have access to affordable health care,” said Hernandez.

The ACA requires everyone to have health care coverage and allows states to setup a health benefit Exchange where people will be able to browse health plan options and purchase coverage. Under SB 703, the BHP would operate independently of California’s Exchange to provide coverage to people with incomes between 133% and 200% of the federal poverty level (those making $15,000 to $21,500 annually). Senator Hernandez crafted the bill to provide a coverage option for people who make too much to qualify for Medi-Cal, but who cannot afford to purchase health coverage on their own - even through the Exchange.

“People who are struggling to pay their rent and put food on the table should not have to spend up to 10% of their income on healthcare” added Hernandez. “Our state’s citizens want to purchase health insurance and they will, if you can make a quality product affordable for them. Without a BHP, we are going to put hard working Californian’s in the unfortunate position of violating the law because they can’t afford to buy insurance.”

Opponents of the bill argue that the BHP could detract from the effectiveness and negotiating clout of the Exchange. Senator Hernandez counters that even without the population covered by the BHP, California’s Exchange would still be the largest in the country and that SB 703 would allow for joint contracting between the Exchange and BHP to maintain purchasing power.

“Opposition to the Basic Health Plan isn’t about purchasing power,” said Hernandez, “Health plans, hospitals, and doctors stopped this bill because they want to make as much profit off the Affordable Care Act as they can.”

Senator Hernandez plans to continue pushing for a BHP in California, stating “We cannot pass on the opportunity to get low-cost, quality health care coverage for nearly a million people at no additional cost to California taxpayers. I am not giving up.”

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